If The CME Hiked Gold And Silver Margins By 50% And Nobody Cared, Did A Tree Fall In The Precious Metal Price Suppression Scheme?

Now that JPM is out of the picture, the last recourse of gold and silver price suppression is exchange margin hikes. Or was. The CME has announced, that as of close today, it will hike various gold and silver (and other metal) contract initial and maintenance margins by 50%.... And nobody cared. This means the CBs are well on their way to losing the imposed gold standard wars. Look for the USD to take a big step lower shortly as nominal values of everything do the inverse.This will naturally be promptly followed by a "sudden and dramatic deterioration in European conditions" as the EUR can not be far behind in the FX race to the bottom.

Look for the USD to take a big step lower shortly as nominal values of everything do the inverse.

ZH has come dangerously close to admitting the previously unthinkable: that the real (global) value of commodities is decoupled from the USD's FX rate of the day.

So the weakening the dollar has little effect on global inflation, it has little effect on how much India, Russia or Europe pays for Oil, Sugar or Wheat when prices are exchanged to their currencies. Time to hide those "Bernanke kills babies!" posters and change it something more subtle and more factual, like "Global warming deniers are killing babies!".

Your problem is that you think the USDX is the best way to measure the strength of the dollar. Might as well have an altimeter that only measures the height of the instrument above the floor of the plane its mounted on for all the good that does.

But hey, you say we can print forever with no consequence, and I TRUST you.

I'm going to keep calling you out as the lousy, dirty Fedophile that you are.

When the USD loses buying power, of fucking course everything else goes up in nominal terms. What kind of an idiot are you?

So does that change the price in rubles or RMB or...? Yes, it does. The USD is still the "reserve" currency. When the reserve is useless, everyone is going to pile out of that trade and leave BennyBoy holding those green (non-biodegradable because of the lead-based ink) coupons. And what do they get into? Rice, sugar, corn, silver, gold, anything that cannot be printed. Because if they can't trust the reserve, what the hell else fiat will they trust? (To be sure, global crop problems only exacerbate the problem, but this isn't a "pick only one" type of question.)

Will you please try to use some of the critical thinking (that you claim) to work? Stop believing that you can think with what you sit on, asshat.

His "lee0326", er, "Lack of Critical Thinking" nickname is doublespeak.

He's a 100% approved tosser, who will manipulate figures as he sees fit, attempt to bury you in stats if you call him out on his figures, move goalposts as he realise he's losing an argument, and will never EVER let you have the last word - probably because he won't get paid if he does.

He's either a government disinformation agent, or a really, really sad case. Good thing no-one is buying his bullshit.

I don't agree with MCT on everything, and he does enjoy in getting certain peoples face; but I will say that as far a poster here goes, it is very clear that he has given serious thought to most of what he writes. Moreover, unlike a lot of his detractors, he does make an attempt to back up what he says given the limits of our posting abilities. So flail away at each other, but realize that on some matters he is slowly but surely eating your lunch, at least from the view of this outside observer.

Right, so EXCEPT for misrepresentation of information, cherry picking of data, obfuscation of the discussion, and moving goalposts, he most certainly has given serious thought to his argument, absolutely. The problem is that it's intellectually dishonest, and he knows it, but yet he still attempts to make it pass.

For shits and giggles, let's assume that he is on a payroll... You are a fool if you believe that and not believe that the other side doesn't have its paid minions too...FWIW, I have a few theories about who the "other side" is.

Now with AGW, the IPCC don't have the cash to finance blog level trolls whereas the coal and oil companies have plenty to throw around...follow the money.

If it is true that intelligence work is starting to be part and parcel of what a blog reader has to sort through all that the intelligence agencys will end up with is very cynical very clever readers that now understand how to sort out intelligence ops. In the long term I cannot help but think this will hurt the ability of those organizations to fool enough people to manipulate outcomes.

I am not so sure what I think of the average person having an intelligence operatives understanding of the world though. That might not be so fun lol.

Do we agree that the situation is complex, i.e. the coupling of the dollar with commodity prices? I think that thinking of things in purely black and white terms is somewhat naive.

I would strongly argue that what is occuring is the constructive interference between two underlying trends. The dollar is dying a slow lingering death while simultaneously the underlying world demand function is increasing. Throw in the wild card of agricultural production being affected by the weather, you have a perfect storm (pun intended).

Now I admit to being on the side that the recent weather extremities are related to AGW at some level. Again, to say that no AGW exists is faith-based denial, similarly, to blame everything on it is equally foolish.

I manage OPM people for my livelihood. My job is to best play the odds. My track record is such that it is clear that I "get" the underlying trend. Going forward you are more likely to succeed if you process all information and assign probabilities; e.g. if you think that AGW is part of the equation, you can only come to the conclusion that Ag. products will become more dear. The other factors only reinforce the conclusion...

I have a Ph.D. in physics with 20 yrs experience in academia along with 3 yrs experience on Wall Street in modeling CDO's, MBS, ABS etc... I also have been managing 8 figures for over 5 years... I get the numbers, read both sides and then decide what is correct. Just like a scientist.

About the same weight I give to the lies from the coal and oil company shills. Sort of a wash, eh? Also, I completely understand the concept of systematic errors and the difficulty of measuring them. I also know that statistical signifigant signals for new effects tend to be obscured by systematic effects until, with better data, you control those systematics.

Btw, care to comment on the article in Nature yesterday?

That is it...I have no desire to continue this discussion, as it is clear that you are now wasting my time. But it was fun to bitch slap you for a while.

Check the registrations.... I have been posting as Flakmeister at various blogs for close to 5 years...Then again, I could understand your confusion, as we do tend to stick to rational arguments (again, I do not always agree) and not to blog thuggery as a number of the miscreants here do...

Much debate regarding 'climate change' legislation is driven by a paticular chart demonstrating a 'hockey stick' ramping in recent global temperatures. However, prior to this we were known to have been in a 'mini ice age' during the time of the Napoleonic Wars and American Revolution (with temperatures having dropped from previously much higher levels).

In fact, it is important to note that the 'estimates' for much of the 'hocky stick' graph were never even remotely realized. Global temperatures leveled and have actually fallen sharply by comparison in the most recent two years.

The fact is, if the measurements can be trusted, we are currently near the higher end of our temperature range as it relates to the past 1000 years. Yes, the rise appears to be somewhat rapid and maybe even driven by human activity. However, the more logical explaination to me right now is that this has possibly come about either naturally or as a result of more widespread advances in agriculture - with subsequent domestication and feeding of animals, as well as global population growth from increased food production, in general.

Considering the potential effects of assumed 'greehouse gases', it is then Methane (particularly from cows), not CO2, which could be considered the primary culprit.

"Agriculture is responsible for an estimated 14 percent of the world's 'greenhouse gases'. A significant portion of these emissions come from methane, which, in terms of its contribution to global warming, is 23 times more powerful than carbon dioxide."

Assuming this is true, then why do global despots seek control of CO2 emissions rather than Methane? Clearly, this provides for them opportunity to dismantle coal-fired power plants and other industry. Further, it may even give them jurisdiction over our ability to exhale!

As an aside, we hear much talk about the depletion of 'non-renewable' resources. If so, then will not these decreasing fossil fuel supplies already act as the self-corrections on human CO2 emissions that are sought by our global puppet leaders?

Further, has not life on earth already coped quite successfully with much higher temperatures in the past, anyway? Will not receding glaciers open up more farmland in the Northern Hemisphere?

And will not more CO2 create more plant life and ultimately more oxygen in our air? I like oxygen, don't you?

Given all of the facts, is this worth handing over even more power to unelected bureaucrats who are clearly supported by a shadow government seeking to dismantle our Constitutional Republic?

I don't want to get in pissing match as I am out of town with the kids and cannot really followup:

1) Methane is a nasty greenhouse gas, however, it tends to be oxidized rather quickly and we really can't do much about it. The worry about Methane is that if permafrosts start to thaw, there a non-negligible chance that large amounts of methane that is known to be trapped could be released on a short time scale (compared to the known methane cycle) and cause a positive feed back.

2) Yes, the earth has coped very well in the past with higher average temperatures. We were not around at the time, e.g. if the sea level was 18 m higher (for which there is strong evidence from recent Antarctic ice core studies), you would find a pretty significant number of our civilizations great cities would be underwater.

3) The studies that I have seen suggest that burning the liquid oil that remains will not tip things over. The concern is the coal that was laid down in the Permian era; that was when the earth self-sequestered a vast amount of carbon. Over a period of 200 yrs, we are releasing what was sequestered over a period of ~100 million years....

3) Receding glaciers will not free up land. Northern Canada does not have the top-soil that exists to it's south. You must also take into account those areas that are lost as well.

I would strongly argue that what is occuring is the constructive interference between two underlying trends. The dollar is dying a slow lingering death while simultaneously the underlying world demand function is increasing. Throw in the wild card of agricultural production being affected by the weather, you have a perfect storm (pun intended).

I have already concluded that the scenario you so aptly present is one in which the only outcome is a global war and we are simply experiencing a prolonging of the inevitable. What we have occuring now is buying of time so someone else can take the fall which is fast approaching. As someone in physics, you can appreciate the value of accelerating mass such as a black hole- it's a mathematical impossibility to continue for 9 more months.

War is a likely outcome, definately at some level. Are China and US able to come up with a sharing arrangement? Based on the US USSR experience and the spectre of MAD, I tend to think that something will be worked out that avoids returning us to the neolithic era.....

Something big is indeed coming. I recall the Bernanke was squaking the loudest about sound fundamentals in the housing market at the precise moment the facade was breaking down. When these fucks are confident that all is well is when my silver senses start tingling.

Good news is that all of the screaming I have bene doing to my fellow plebes has definitely been vindicated by the fiat value of these metals. People that dismissed these ramblings before are now asking me questions. Fun indeed.

I know I got bashed on here for this statement before, but I have been pretty successful in cleaning out pawn shops (aka Ghetto Mints) of their silver coins below melt value. I feel like I am a mexican merchant negotiating with them, but it's part o' the fun.

I have been driving out to PA to flea markets buying up silver and gold for pennies on the dollar. I carry a test kit to confirm the purity. You can find silver items for less than 1/4th the spot price if you kow how to bargin.

The point is, as with you, those who have questioned my sanity, are now questioning their own!

well, after yesterday they must be thinking that they're impotent to stop this shit. so if they can't scare the longs that won't stand for delivery then maybe they can hike the rates enough to scare them.

if that doesn't work, they're shit out of luck. Hello: Executive Order 6102 v2.0

Gold recall is rhetoric bullshit. In the 30's gold was literally money. As such, the Fed could not print money, they had to have gold too. Now that there is zero gold-back dollars when Nixon ceased that link, the Bernak can print endless until every computer electron is sacrificed without the need for gold. As such, the Bernak only needs electrons for his computer and has zero need for physical gold to 'print' dollars.

They are certainly not going to mess with legal tender because of a force majeure. Is the printing press broken? Chopper throw a blade? Until that happens, metals are a "sideshow - nothing to see here" except to those who have been predicting this all along by buying.

And how many people do you think would comply this time around, hmm? The Govvy sells it to you one week and outlaws it the next? FDR had "goodwill" from the sheeple, the crew holding physical PMs today would rather hoist the black flag and spit on their hands. Believe it.

Just_light, you are right. Extreme volatility coming. And so is that 3 letter word, war.

Actually here, but just like the speech in my linked post, no one, no one can call the game for what it really is. If th eUS has been runnign under emergency powers since 1933 and that fact comes out for realz, what does that do to the whole global financial/legal/trading structure?

The scam is of humongous proportions. It will be undone in an explosion.

I concur. Not so sure about the EP act of 1933 but whatever the case, these fake markets are about to implode. Buy silver. Like I predicted on Monday, silver going to $40+ in 3-4 weeks. Seems, we may have that much sooner.

ORI- one more thing: If I was a Greek, Irishman et al, I'd buy all the gold and silver I could before those banks implode.

They can't pull that shit anymore now that we are in the age of the internet. Approximately 60 seconds after that announcement there will be 100 articles outlining why this is happening and silver will disappear off the shelves of the retailers, everyone with a contract will stand for delivery and Comex closes.

Why would anyone other than a gov't entity short into a developing shortage with the printing presses going full out?

Holy shit! This is HUGE news. Speculators who didn't intend to stand for delivery should have rolled over one and all at a hike like that. As an above commenter noted, this means that there will be a LOT of people standing for delivery.

This probably means we are about to see the moonshot.

Let's see if I can be made to eat my words. I really want it to go back down, as I have a larger than average amount I want to put into silver this month that isn't available to me until Monday. Being able to buy much more than I think I will be able to would make those words of mine sweet and delicious.

Anyone who acts to tear down this corrupt system is a patriot in my book. Hedge funds and welfare mammas included.

Don't think that means that those who corrupted the system get a free pass. The banks can, should, and will have their higher ups torn to shreds by angry mobs at some point, unless they flee the country soon.

Excellent news. Increasing margins just encourages taking delivery. Why put up 50% of purchase price and risk a no delivery for 2-1 leverage? Bring it up to 100% and let's empty those fucking vaults over there at the Comex! We are approaching the moment of true price discovery for PM's.

I find it funny that they keep raising the margin on commodities but Greenspan and The Bernake refuse to use margins to control market speculation......if one remembers AG said they wouldn't work but in the acutal minutes of the FOMC he said they would work extreamly well.

First: metal specs be careful of what you wish for. Any dislocation that removes the current currency regime is going to leave you begging on the street. Gold/silver won't have much or any value at all.

Second: what is the CFTC supposed to do? There is silver mania and hoarding the consequence is large number/size of paper positions. CFTC is being (somewhat) responsible pretending to keep the paper gold/silver Ponzi schemes under some kind of control.

Third: a lot of people seem to think the metal markets are 'one way, only'. Would you like to meet my friend, "Mr. Real Estate"? He was supposed to do nothing but grow, too.

Fourth: any talk of an official or unofficial US or OECD gold or silver 'standard' or metal- backed- currency is nonsense. Gold/silver are not currencies, rather they are entirely speculative investments (gold) or 50/50 speculative and industrial (silver). Any commodity whose value is set by credit limits cannot be any less speculative than the credit is itself.

In other words, gold/silver are derivatives for finance credit. Not currency which is a derivative of economic output. Or entropy, if you like!

please stop bitchin about margin increases...we need them to control overleveraged assholes as the price climbs and volatilty rises...and risks of deficits appear...silver moves at 5k every dollar spreads are getting wider as the price climbs...when dick heads that trade this stuff with 5k in there account we need this to protect our asses from you over leveraged jack offs going deficit on the short and long side....OMAB!!!!!!!!!!!!!

Things are a mess, Clearly they are concerned over commodities, The inflation in everything has just gone crazy,

I have noticed a big change as of late, The BOE indicating IR hikes in May, The ECB a little about rate hikes listed on ZH, This move by the Comex, The elite are moving and anyone thinks the elite cant pull the rug on commodities best be carefull, ZIRP is the driver and even talk of exiting ZIRP will do the trick nice, Watch the MSM over the next few weeks, It will all be about inflation and the need to tighten and such like, A MSM blits on the subject should do the trick,

Failing a downward price trend in commodities by talk then actions will start in the IR Hikes,

Everyone is bullish on commodities at the moment so thats a real thing indicating a market top,

I am bullish on Silver but a test of $20.00 may easily be on the cards if the boys decide to do whatever it takes to stall things, The backwardation in Silver the boys arnt going to like that.

Just be carefull the forces of the elite must never be underestimated.

One problem with your thesis - those standing and accumulating don't care. They are macro investors at this point, and welcome the PTB removing leverage from the price discovery. Nobody smart sells physical based on jawboning, and most buyers of size are smart, it's self evident.

In terms of leverage controlled it's still a tiny absolute number. The margin is no where near any point of pain and there's what? Some 95% of the spread left to close before full payment? The EXs will walk this up untill the specs start to flinch.

Watch out, folks. If this is not the big one, this is the beginning of the big one. Currency, bonds, confidence, manipulation. This situation contains it all. Very exciting. But look for stress in the following areas: silver producer stock prices going weak if they have hedged too much. Also, what about CME? They can't be innocent here. Puts on CME.

Supposedly, silver miners have been prescient enough not to get sucked into hedging this time. Those who get silver as a by product of mining other core elements have been more willing to hedge. Shouldn't be much of an issue for those looking to invest in silver shares.

Wondered what the spike in price was. Doesn't raising the margin normally cause the price to fall? Ooops! $32.18 and climbing last I looked... Will this margin rise be the equivalent to raising the price of deckchair tickets on the Titanic after it hit the iceberg, a total irrelevence to ongoing events? Hope you have booked your place on a precious metals lifeboat with something real and not a paper promise.

check out today's POMO results: bid to accepted ration of 5.59. Historically such high number correlates with lower stock market close. I wouldn't be suprised if at least one of the PDs put some of this fresh POMO cash to work pressuring PMs, but even I (PM bull) am stunned by silver's performance yesterday and today. If there is anything but profit taking standing between here and $33, I don't know what it would be...given that increased margin requirements and stock options expiry (GLD, SLV et al) seem to be unable to stop the rise. It is so beautiful to witness. I've reduced my hedge position and have gone longer PMs.....(this is where I usually get burned!). Anyway, congratulations to all my fellow ZH PM bulls and I hope you are enjoying the ride as much or more than I am.

Oh, and a special shout out and "thank you" to Turd. I vote we rename yesterday from Thursday to "Turdsday." What do you think?

I don't dismiss the viewpoint 37fullhedge presents: I'm 40% invested in silver now. I got hit hard during the the summer of 2008.

However, I think things are a little different this time. (positive real interest rates existed for many many months before the last big commodities pullback and it came with a huge thunderous crash in housing....should have seen it coming).

How do I interpret these new margins? It looks like a typical silver contract for 5000 ounces has a 1215 margin, but that would be less than 1% of the value. I was thinking the margins were more than that - more like 10%.

Added: here's the link to an older post on margin hikes - 8775 is quoted as an initial margin for a spec trader.

Let's all be reminded that COMEX writes the rules, and as in the days of the Hunt Bros they can simply increase margin to 100%, and then forbid buying, leaving only selling as the alternative. And if its a matter of saving their masters, COMEX will do whatever it takes to destroy those attempting to take delivery if that means delivery destroys its masters...

unless other powers that be have forewarned them from doing such at the expense of, say, total financial armagedon.

Well, I looked on the CME website and found the initial margin on their "Outright margins" list for spec traders for all tiers is $11,138. It was $6750 until Nov 9 of last year. I don't know if this margin is going up or not.

The margins shown above are "intra spread" margins. Anyone know what that means, or all the tiers? I found the CME website to be clear as mud on those things.